What happened to New Voice infrastructure?

A report released by telecom market research firm RHK shows that the North American market for New Voice Infrastructure (NVI) will only grow 12% annually.

A new report released by telecom market research firm RHK shows that the North American market for new voice infrastructure (NVI) will reach $210 million in 2001 – growing only 12% annually through 2003.

A recent update to RHK’s November forecast shows that although NVI will exceed RHK’s previous prediction for 2001, the overall rate for this market will not see the kind of growth originally expected. RHK experts attribute this change to a variety of factors, including lack of end-user demand, sluggish deployment of broadband access, and the availability of highly discounted TDM voice equipment.

RHK’s new voice infrastructure forecast covers shipments for high-density media gateways, softswitches, application switches, application servers, and media servers for service providers. The forecast does not include Voice-over-IP applications for the enterprise.

NVI is an emerging market that in 2000 began to generate revenue for the first time. RHK explains that expectations for this market’s rapid growth have been curtailed by the recent economic changes in the market.

‘The downturn of the North American telecom market has affected NVI deployments significantly,’ states John Kuzma, RHK’s Senior Analyst for New Voice Infrastructure. ‘We have seen a shortfall in end-user demand and a weak competitive landscape, both of which give incumbent carriers little incentive to offer any form of packet-voice to their customers,’ Kuzma continues, ‘Despite its shortcomings, NVI is still an emerging market in its formative years. A number of variables could change it dramatically as we wait for the technology to mature.’

RHK expects growth of NVI to come from applications such as pre-switch Internet offload, post-switch Internet offload, tandem replacement, and tandem offload. These applications will be critical for service providers who seek to offer personalised services to their end users.

‘We expect interest in hosted voice applications to increase as service providers search for methods to grow revenue and differentiate themselves,’ says Kuzma. ‘Solutions such as PacketCable hold significant promise to address this demand, with the potential to deliver end-to-end VoIP to millions of residential users and to pressure incumbents to offer local-loop VoIP.’